Here is the most important factual find about the stock market I’ve learned for some many years: More than 100% of equity market gains since January 2009 have taken place during the weeks the Fed purchased Treasury bonds and mortgages.

And conversely, during the weeks when the Fed did NOT buy Treasuries or mortgage backed bonds, the stock market declined. Can you beat that? Credit to Michael Cembalest, Chairman of Market and Investment Strategy for J.P. Morgan Asset Management, for that extraordinary discovery.

1 thought on “Banana Republic: Stock Prices Have Risen Every Week The Fed Bought Bonds Since 2009 And Have Declined When …”

I have been watching the same part of the puzzle since the Crash of 2007-08. Whenever the market really started going south, the FED steps in and starts buying. The market is so rigged, and crooked, no individual investor is safe. As one who was raised to watch the market as an indicator of the economy, today, it has become a negative indicator.
The greatest example was the morning of the 16th. Before the congress came out with their so-called short term settlement, it was up over 300 points. The pundits said it was the agreement, but it started far before the congress met……it is called insider information and trading, and used to be illegal.
85% of all trades are high frequency, meaning individuals controlling huge funds buy and sell large blocks of securities in less time than you blink your eye. They are obviously given the inside information, and they skim more money OUT of the system, they put nothing back in.
The US stock market used to be the biggest and most trustworthy in the world. Now, nobody trusts us (with good reason) and the FED is carrying 68% of our national debt. Foreign investment is a trickle compared to 2007. By 2010, it became clear nothing would be done to fix the problems, investigate and punish the wrongdoers……nothing would change.
Now, the US stock market is a shadow of it’s former self, and it is shrinking more each month. When a market allows the greedy guts to suck money out, while putting nothing in, bankruptcy is in the future of the US. I am glad I won’t be alive to see it, it will be worse than anything this generation has ever seen.